The Strategic Aspirations of the Reserve Bank of India: Case Analysis

Categories: Bank

Analysis, Pages 9 (2064 words)

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1. Identify the chances and hazards that the retailing industry in India uses to local and foreign business.

Opportunities
Economic growth
Favorable development
Growing size of consuming class
Global market awareness
More direct exposure to global markets through TV & & Web Growing Market
Consumers from bigger location are getting reached
Socio-cultural change
Increasing variety of youths & & increment in earnings level
Advancing Technology
Software assistance to operations
Much better supply chain management

Hazard

Political Uncertainty
- Organized sellers are typically resisted in order to preserve support from
messy vendors. Regulatory Issues
- Direct foreign investment not permitted
- Realty laws for setting up facilities
- Re-structuring of tax
Week supply System
Trouble in covering such a big location.
Standard fragmented distribution & & retail networks
Unpredictable logistics
Purchasers Psychology
Misunderstanding among middle class consumers that the modern retail formats are more expensive and not inexpensive for them.

2. Prepare an ETOP for a company thinking about getting in the retailing industry in India.

Case III
HELPAGE INDIA
Questions
1. In your viewpoint, what is the unique skills of HelpAge India? The distinctive competence of HelpAge India are:

2. Prepare a strategic benefit profile for HelpAge India.

Case IV
BHARAT HEAVY ELECTRICALS RESTRICTED FOCUSES ON THE EQUIPMENT MARKET Questions
1. BHEL is generally creating and executing concentration techniques nationally along with internationally, in the power equipment sector. Do you think it should broaden the scope of its techniques to include integration or diversity? Why?

Bharat Heavy Electricals Limited (BHEL) is India's largest engineering and manufacturing enterprise, operating in the energy sector, employing more than 42000 people.

Established in 1956, it has established its presence in the heavy electrical equipments industry nationally as well as globally. BHEL is one of the navaratnas (lit. nine gems) among the public sector enterprises in India. Its vision is to be 'a world class enterprise committed to enhancing stakeholder value'. Its mission statement is: 'to be an Indian multinational engineering enterprise providing total business solutions through quality products, systems, and services in the fields of energy, industry, transportation, infrastructure, and other potential areas'.

BHEL's turnover hit an all-time high of Rs. 18,739 crore, registering a growth of 29 per cent, while net profit increased by 44 per cent to touch Rs. 2,415 crore in 2006-07. The company has a comfortable order book position of Rs. 55,000 crore for 2007-8 and beyond. The company booked export orders worth Rs. 1,903 crore in 2006-07. It is looking toward to US$10 billion exports by 2012 from the present US$ 4 billion. The capital investment plan of BHEL for the 11th National Plan period envisages an investment of Rs 3,200 crore, mainly to enhance its manufacturing capacity from 10000 MW to 15000 MW.

BHEL has formulated a five-year strategic plan with the aim of achieving a sustainable profitable growth, targeting at a turnover of Rs. 45,000 crore by 2012. The strategy is driven by a combination of organic and inorganic growth. Organic growth is planned through capacity and capability enhancement, designed to leverage the company's core are s of power, supported by the industry, transmission, exports and spares and services businesses. For the purpose of inorganic growth, BHEL plans to pursue mergers and acquisition and joint ventures and grow operations both in domestic and export markets.

Yes, it should broaden the scope of its strategies to include integration or diversification, The company has planned to set up an integrated manufacturing facility for ingots to wafers, cells and panels using crystalline photovoltaic technology.

The company, which currently manufactures solar PV panels at its Bangalore plant, has estimated the investment for new facility in the region of Rs 800 crore. “The company plans to expand the current capacity of its solar PV panel unit from 26 Mw to 480 Mw in two phases with 240 Mw in each phase. The proposed plant will be completely automated and first of its kind in the country. Till now, no other company manufactures their own solar wafers and cells including solar PV panels. The EDN has submitted a proposal to the company’s board and the final decision is yet to be taken in this regard. The company’s head office will decide on the location and exact investment required for the backward integration project, he said adding that the management was yet to finalise the location.

2. Suppose BHEL plans to diversify its business. What areas should it diversify into? Give reasons to justify your choice BHEL is engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a wide range of products and services for the core sectors of the economy.It is ranked as the 12th largest power equipment manufacturer in the world. Given the present business environment, particularly in the power sector, we are focusing on increasing our value contribution in a shrinking market. Towards this, we have adopted a two-pronged strategy to sustain profitable growth in the long-term. In the power sector, we will be enhancing our focus on EPC business and enlarging our scope of offer.

We have a joint venture with NTPC called NBPPL, and it would be the manufacturing base for certain BOP equipment such as AHP and CHP. We are also working with GE India to offer water management solutions for the power sector. Secondly, smaller business areas such as transportation, transmission, and renewable are getting more attention, so as to maintain a balanced portfolio of offerings. In addition, there would be an increased emphasis on technology and R&D so as to meet emerging business requirements. Of course, capability building is a continuous process for fully realising manufacturing capacities. Today the business environment has become very challenging. We have numerous issues, both domestic as well as global.

I don’t remember the company confronting so many challenges all at the same time, ever. Undoubtedly, this could be a short-term phenomenon. In the medium and long-term, if the country is to achieve higher GDP growth, business prospects are bound to improve. We have tried to address several challenges in our new ‘Strategic Plan 2017’, and aspire to touch the $18 billion mark by 2017. But success is 2 per cent ideation and 98 per cent implementation. So the 2 per cent job is over. I have put in place an implementation mechanism to ensure the other 98 per cent. I am confident of successfully confronting current business challenges to sustain the long-term growth of the company. BEHL is an active player in solar and intend to re-enter the wind business. But in India and the world, more than 50 per cent energy is thermal, with coal as the fuel. And, coal would continue to remain as the dominant source of fuel for the foreseeable future.

Hence, BHEL, as manufacturer of equipment, believes that the biggest contribution for green energy initiatives is developing energy-efficient, fuel-efficient and environment-friendly equipment for our customers. Our equipment already boasts of world class performance with respect to PLF, operating availability, planned and forced outages. Efforts are on to further improve the heat rate and efficiency and reduce auxiliary power consumption. This ultimately results in lower fuel consumption per unit electricity produced. Introduction and indigenisation of supercritical technology by BHEL in India is one of the steps in this direction. Jointly with NTPC and IGCAR, we are developing advanced ultra supercritical technology for the first time in India. Other areas attracting investments are commercialization of IGCC and IGBT technologies in power and transportation areas.

Case V

THE INTERNATIONALISATION OF KALYANI GROUP
Questions
1.What is the motive for internationalisation by the Kalyani Group? Discuss.

Mr B N Kalyani , Chairman of the USD 2.5 Billion, Kalyani Group is the principal driving force behind the growth and success of the Kalyani Group of Companies. An able entrepreneur and technocrat, Mr Kalyani has enriched the group with his vision of sound business governance and value driven management practices. He is the driving force behind the group's spirit and commitment to deliver products and services of uncompromising quality and integrity consistent with the Kalyani brand and image. With a business experience of over three decades, Group Chairman, Mr B N Kalyani believes that the ability to innovate and change is critical to the ongoing success of any business. Anticipating what the future may bring and predicting the needs of customers in a fast changing marketplace can be extremely difficult; yet that really is the basis of any strategy.

Mr. Kalyani has set the group on its growth path and is credited with the extraordinary vision for its entry into the fast emerging infrastructure development arena in India. The group has tied up with Alstom, France to manufacture turbines and generators required for various super critical power plants. The Bangalore-Mysore Infrastructure Corridor, is one of the largest and most ambitious self-contained infrastructure projects of its kind that is being set up in the country which will contribute in changing the economic face of Karnataka. In addition, the group is setting up the largest multi-product Special Economic Zone in Pune District of Maharashtra. In pursuance of his vision to contribute to a clean and emission free environment, the group has set up a wind energy company - KENERSYS to manufacture various energy efficient wind turbines for domestic and international markets. The group also has its own wind turbines in Maharashtra which generate "green energy" for the group's manufacturing operations. Mr Kalyani takes pride in being at the forefront of a globalizing India and to contribute in making "Made in India" a global high tech brand in the manufacturing industry.

2. Which type of international strategy is Kalyani Group adopting? Explain.

At the Kalyani Group, the key to successful marketing is a thorough understanding of the environment in which your business operates, your position in the market place, products and service opportunities, competition, and most of all changing customer need. With a business experience of 27 years, Group Chairman, Mr B N Kalyani believes that the ability to innovate and change is critical to the ongoing success of any business. Anticipating what the future may bring and predicting the needs of customers in a fast changing marketplace can be extremely difficult; yet that really is the basis of any strategy.

Positioning

“Kalyani Group Companies are positioned No.1 or No.2 in all main businesses in the Indian Market and are also exporting to international OEM’s” 1 in Forging & Machined components
1 in Axle Aggregates in India
1 in Wheels in India
1 in Alloy Steel
Since 1997, the company has been relentlessly following a global strategy though it had virtually no prescence in globel markets till then.By 2005, total revenue of the company. Bharat Forge has also been successful in making significant headway in supplying engine and suspension components to prestigious European OEM’s. Bharat Forge now has 50 international customers. These include major customers such as Daimler Chrysler, Caterpillar- Perkins, Renault Vehicle Industries, Volvo, Honda, Cummins, Dana, Arvin Meritor and Toyota. No wonder Bharat Forge proudly boasts of being India’s largest exporter of auto components. It greets visitors on its website with: “Bharat Forge Ltd., the flagship company of the US $1.5 billion Kalyani Group, is a ’Full Service Supplier’ of engine & chassis components.

It is the largest exporter of auto components from India and leading chassis component manufacturer in the world. With manufacturing facilities spread over 9 locations and 6 countries - two in India, three in Germany, one in Sweden, one in Scotland, one in North America and one in China, the company manufactures a wide range of safety and critical components for passenger cars, commercial vehicles and diesel engines. The company also manufactures specialized components for the railway, construction equipment, oil & gas and many other industries. The group is even capable of producing large volume parts in both steel and aluminum. Way back in 1961, when Bharat Forge was born as a company, few could have imagined that the company will go so far in the future. India was a sheltered and protected economy in those days and becoming world class was not even a gleam in the eye.

India had only a tiny automobile mantra of import substitution meant that Indian companies - both in the automobiles and the auto components sectors - constantly lagged behind international standards. Yet, Bharat Forge, like so many other Indian companies whose true entrepreneurial energies were hidden till the 1990s, managed to survive the socialist era of the Indian economy by focusing on quality in its own way. It is only when liberal economic policies were launched beginning 1991 that a company like Bharat Forge started to find its true calling.